Regulation of OTT in Telecom Bill

The inclusion of Over The Top or OTT (Communication Services) within the ambit of the draft Indian Telecommunication Bill, 2022 that was unveiled recently for public comments, is a feature that has drawn much attention and comment.

What does this mean?

The main argument behind its inclusion is the principle of “same service, same rules”. Superficially, it seems logical that communication services, whether provided by telcos or OTTs, should be treated similarly. However, this is completely erroneous.

Why is it incorrect?

• Same service means that as a user, one should be able to substitute one for the other at its own volition. But no OTT provider including those providing communication services such as WhatsApp, Zoom, email, etc. can reach a customer without the intermediation and services of a telecom service provider. But the converse is not true.
• The absence of OTT is no impediment for a telco to provide its services. OTT communication services are applications or value-added communication services that ride on the basic communication services that telcos provide. The latter is in the domain of carriage and the former is in the domain of applications such as group and video communication, encryption, etc.

Why then telcos want the OTT in the new telecom bill?

Quite simply, it is the desire to preserve the arbitrage that exists between voice and data tariffs. In OTT services, the telco gets lower data and not a higher voice/SMS tariff.

Arguments against covering OTT in new telecom bill –

OTT communication services are already covered under the existing IT Act and, presumably, will continue to be so under the proposed Digital India Act. Whether it is encryption, data storage, interception or cooperation with law enforcement, OTTs can be and are regulated — but not licensed or pre-authorised.

Principles based distinction –

• Simply put, the proposed Telecom Bill and the current Telegraph Act are based on the principle that provision of telecommunication services is the sole privilege of the government except to the extent that private entities are permitted — read licensed or authorised.
• On the other hand, the IT Act, which regulates technology usage, is based on the exact opposite premise: everything is permitted except that which is specifically and explicitly barred and subject to any mandatory requirements that must be met.
• A similar principle operates in respect of content, which the Information and Broadcasting Ministry, Prasar Bharti and the Censor Board, regulate. It is precisely this wide latitude that is afforded in technology/applications and content that enables and encourages creativity, innovation, new products and venture capital funding.

Conclusion –

Hardly any other country has equated OTT communication services with foundational telecommunication services. Instead, the Government would be well-advised to include whatever controls are deemed necessary in the soon-to-be unveiled Digital India Act.

Source – The Hindu

QUESTION – Experts have argued that including OTT communication service providers within the ambit of the Telecom Bill is a deeply flawed idea that could seriously compromise the energy, innovation and funding that characterises India’s startup ecosystem today. Comment.